Almost

Despite spring-like weather here, there and almost everywhere,this week’s price erosion came to a halt Thursday as many pointsturned in flat performances and a few managed small rallies.

FERC earlier this week reaffirmed “almost without exception” allof the “basic policy calls” that it made in its landmark Order2000, which seeks to have regional electric transmissionorganizations (RTOs) up and running in every region of the nationby the end of 2001.

A futures screen that was almost a dime higher during morningcash trading and continued cold temperatures were enough to allowprices to put even more distance between themselves and indexesTuesday. Meanwhile, transport-constrained Northeast citygates wereback for a repeat performance of their skyrocket act from lateJanuary.

After trading within an extremely tight, 3-cent range for almostthe entire trading session Thursday, the January contract was hitwith a late sell-off, as bears took advantage of nearly-illiquid,pre-holiday trading conditions. No fresh news was seen to incitethe liquidation, leaving several traders to suggest it was anattempt to set a bearish tone for the January contract expirationTuesday. The prompt month finished down 4.5 cents at $2.399 amidlight estimated volume of 28,617.

Much like the day before, cash prices rose by a dime or moreTuesday almost purely on weather fundamentals. Unlike the daybefore, western points failed to lag behind the overall marketlargely due to some supply shortness. The result was generallytight basis all around, ranging from the Rockies in the $2.30sthrough the Gulf Coast and Midcontinent in the $2.40s and Midwestcitygates in the $2.50s to Appalachia and California in the $2.60s.Only Northeast citygates in the $2.80s and $2.90s put muchappreciable difference between themselves and the rest of themarket.

As a result of an almost two-year effort, Tennessee Gas Pipelineannounced yesterday it has renegotiated contracts for 80% of thefirm transportation capacity that’s due to expire on its system inNovember 2000. At the same time, the pipeline said it has fullyrecontracted its storage capacity, a large chunk of which wasscheduled to expire also.

Continuing its strategy to be a heavy hitter in the Gulf Coast natural gas liquids market, Enterprise Products Partners LP of Houston last week acquired Tejas Natural Gas Liquids LLC from Shell Oil affiliate Tejas Energy LLC and signed a long-term gas processing agreement with Shell for its entire bounty of Gulf of Mexico gas production. The deal was announced in April.

“It’s been a fun market recently if you like roller-coasters.” AGulf Coast marketer was referring to Thursday pricing that onceagain started significantly lower but later moved higher to settlenear the top end of daily ranges. Softening continued at mostpoints but was very mild compared to the larger drops earlier thisweek. A majority of the declines were about a nickel or less, and afew scattered points even turned in flat performances.

After plunging almost a dime lower in response to alarger-than-expected storage injection Wednesday afternoon, thefutures market shuffled sideways yesterday in ahurricane-abbreviated trading session. Traders were unable to gleanmuch fundamentally positive out of a natural gas market that isfaced with mild temperatures and little or no hurricane activity inthe wake of Floyd. The October contract finished at $2.546, down8.2-cents from Wednesday’s close.